Tom K is a financial blogger and investor who embraces continuous learning. He believes in living below one's financial means, expanding one's financial means and crafting an effective system to capture opportunities in the Singapore stock market. This article was first published on Tom K's blog, and is reproduced with permission.
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1) ThaiBev F&N's Vision 2020: Ever since Thai Beverage became the new controlling owner of F&N, it is only right to analyse the growth drivers of F&N in line with ThaiBev's. I am excited about the "ThaiBev F&N Vision 2020" whereby the two companies partner each other in areas of market expertise, leverage distribution channels and explore economies of cost.
One initiative under this vision is F&N's tapping on ThaiBev's distribution channels in Thailand to launch the 100Plus drink there. A tie-up between the two companies with an established track record in beverages in South East Asia is exciting.
2) Clear focus on markets and products: Unlike many companies which have jumped or are jumping on the "China bandwagon", F&N clearly knows its key strengths are in its strong foothold in ASEAN which it will leverage on.
F&N will focus on new markets in Vietnam, Philippines, Indonesia and Myanmar beside its current markets in Malaysia, Singapore and Thailand. This focus is a pre-requisite for achieving greater heights.
Currently, the main products are beer in Myanmar, dairy products in Thailand and Vietnam and beverages in Indonesia; hence opportunities are aplenty for F&N to market the other drinks of its product line to each of these countries.
For example, F&N has identified its top non-alcoholic beverages in its growth strategies -- 100Plus, Nutrisoy, EST and Oishi. Besides the marketing of 100Plus to Thailand, F&N is also planning to launch its Thailand's best-performing green tea, Oishi, in Singapore this year. I also expect F&N to launch its Myanmar's best-selling Myanmar Beer in other parts of Asean too.
3) Good strategy: With more people in Asean expected to embrace health, wellness and fitness, I believe F&N is on the right track to leverage the "Health and Wellness" credentials of its 100Plus and Nutrisoy.
4) Printing and publishing business doing well: This business (which generated 11% of F&N's FY2014 revenue) is expected to continue to perform well. F&N's subsidiary in Marshall Cavendish Education has its "Math in Focus" teaching software approved by California's state board for use in the district's schools while the subsidiary's primary school Mathematics books continue to be well-embraced in Hong Kong.
5) Diversification of revenue drivers: I am quite surprised that Malaysia accounted for 42% of F&N's FY2014 revenue. I welcome the fact as Singapore is a small market.
Besides the three factors of commodity prices, inflationary price pressures and foreign exchange rates being the key considerations of F&N's growth strategies as stated in its annual report, I would like to add that with 100Plus and Nutrisoy identified as key products for F&N's growth strategy, some consumer education may also be necessary to shift consumers' taste buds towards isotonic drinks and soya beans.
After all, they are not as sugary as the other non-alcholic beverages of F&N which consumers take to readily.
